China Has Accomplished Something In Global Trade Not Seen Since Colonial Britain

China's exports and imports of goods amounted to $4.16 trillion in
2013, topping the U.S. for the first time.

A new Standard Chartered report by Madhur Jha and other Standard
Chartered economists, titled "Global Trade Unbundled," highlights
just how much of a trading giant China has become.

"China is a true mega-trader — a position last held by
colonial Britain, with trade significant not only as a share of
world trade (11.5%) but also of its own GDP (47%),"
according to Jha. "China will likely become a champion of free
trade."

The U.S. is China's top export destination. China's trade with
Latin America has risen more than 200 times since 1990 and is the
fastest-growing corridor. China's trade is beginning to slow,
however. Exports accounted for about 25% of GDP in 2012, down
from 35% in 2007. And the slowdown is broad based.

The good news is despite the slowdown, exports to Latin America
and Africa are still growing at "double-digit levels." Jha and
the other authors identity a few reasons they think China will
continue to be a leader of world trade.

The economic recovery in the developed world is a positive
for China, as demand picks up.

"China remains a leading force in world trade, having
consolidated its position as key player in global supply chains."

While China no longer has the low-cost advantage, it is
moving up the value chain and has a larger share in medium and
high-tech exports. "We believe it is unlikely that there will be
significant migration of these processes out of China for lack of
suitable replacement centers, with both the infrastructure and
the scale to accommodate these exports."

There is too much attention paid to Chinese exports and not
enough to imports. "The focus on more balanced growth and
structural reforms domestically will, over time, allow for lower
savings and higher consumption," writes Jha. "…Some of this shift
towards consumption will filter nto greater imports from the rest
of the world, strengthening global trade growth and South-South
trade in particular."

"China’s trade growth is unlikely to rebound to the double-digit
level seen over the last couple of decades. However, it is
important to remember that the sheer size of China’s trade will
mean that even 7% GDP growth, faster than the growth in developed
world trade, would make China the single biggest contributor to
world trade in absolute terms."